Consumers, businesses choosing noncash payments over checks

Consumers wrote two-thirds fewer checks in 2015, compared to 2000, and noncash payments for goods has risen nearly 95% over the same period, according to the Federal Reserve. Noncash payments include checks, card payments and electronic transfers made through the automated clearinghouse (ACH) system.

The average number of checks written per household declined to 7.1 in 2015, from 19.3 in 2000. Noncash payments rose to 78.6, from 40.3 per month on average. Businesses have also increasingly replaced check payments with noncash payments.

The Federal Reserve recently released more data on how consumers and businesses pay for goods in its 2016 Federal Reserve Payments Study. Along with the information on checks and noncash payments, the following are some of the other highlights from the study:

• The number of checks businesses wrote per month declined to 24.1 checks in 2015, from 66 in 2000. Over the same period, the number of transfers through the automated clearinghouse system increased to 29.8, from 13.4 per month. The value of the transfers more than doubled to $148.5 trillion in 2015, from 2000.
• In 2015, the most popular payment type for consumers was non-prepaid debit cards, followed by credit cards, checks and automated clearinghouse debit transfers. The most popular payment type for businesses was ACH credit transfers, followed by checks, credit cards and non-prepaid debit cards.
• About 60% of all credit card accounts for consumers and more than 76% of all balances included some debt revolving between statement periods.
• The number of payments made by alternate means, including via mobile device, services for person-to-person payments and online authentication payments, rose between 2012 and 2015. But the number of the payments remains low compared to the number and value of noncash payments.